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Romania president weighs options for PM after vote

Source: Thomson Reuters Foundation - Mon, 10 Dec 2012 08:38 GMT
Author: Reuters
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* PM's alliance won clear parliamentary majority

* President to name next PM, could try and split alliance

* Uncertainty would raise doubts over new IMF deal (Adds detail and comment on parliament, economy)

By Luiza Ilie and Ioana Patran

BUCHAREST, Dec 10 (Reuters) - Romania's President Traian Basescu weighed his options for prime minister on Monday but is expected to re-appoint his leftist opponent Victor Ponta rather than risk a fresh political standoff by appointing someone other than the current premier.

Ponta's Social Liberal Union (USL) won 58-60 percent of votes Sunday's parliamentary elections, official results showed.

"President Basescu could try to deny Mr. Ponta a second term, but USL's overwhelming victory leaves little scope for alternative scenarios," said UniCredit analyst Dan Bucsa.

Any uncertainty over a new government would delay talks over a new deal with the International Monetary Fund to replace a 5 billion euro agreement expiring in early 2013 and hit Romanian assets. The leu currency was a touch higher against the euro at 0817 GMT.

"We expect Romanian assets to underperform and volatility to rise over the coming days, until a new government is formed."

The Balkan country has made progress in some areas since the 1989 fall of communist dictator Nicolae Ceausescu, but still trails other ex-communist neighbours like Hungary, Poland and the Czech Republic.

Corruption is rife, its roads and rail are outdated and it still cannot provide reliable basic services like running water and electricity to all its 19 million people.

The USL is popular because of the previous centre-right administration's austerity policies, which it has promised to roll back by cutting taxes and raising salaries, though it has limited room given an economy that is barely growing.

After the USL failed to impeach Basescu in July, which brought harsh criticism from the European Union and United States for tactics undermining the rule of law, the president said he would never ask Ponta to be prime minister again.

Basescu has not yet commented on the election results.

(Writing by Sam Cage/editing by Chris Pizzey in London, +44 (0)207 542-4441)

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